UNITED STATES

                   SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C. 20549

                              FORM 10-K/A


             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended  June 1, 1996  Commission file number 1-11479
                           -----------                          -------

                             E-Z-EM, Inc.                      
         ------------------------------------------------------
         (Exact name of registrant as specified in its charter)

                Delaware                           11-1999504     
      -------------------------------           ----------------
      (State or other jurisdiction of           (I.R.S. Employer
      incorporation or organization)           Identification No.)

        717 Main Street, Westbury, New York               11590   
      ----------------------------------------          ----------
      (Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code  (516) 333-8230

Securities registered pursuant to Section 12(b) of the Act:  Class A
   Common Stock, par value $.10 and Class B Common Stock, par value $.10

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.

                      Yes   /X/         No     / /

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. /X/

The aggregate market value of the registrant's voting Class A Common
Stock held by non-affiliates on August 5, 1996 was $21,655,000.

On August 5, 1996, there were 4,035,346 shares of the registrant's
Class A Common Stock outstanding and 5,209,655 shares of the
registrant's Class B Common Stock outstanding.

                              Page 1 of 40
                        Exhibit Index on Page 2
<PAGE>
                                PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

                                                                   Page
                                                                   ----

(a)  l.  FINANCIAL STATEMENTS

     The following consolidated financial statements and
supplementary data of Registrant and its subsidiaries required
by Part II, Item 8, are included in Part IV of this report:

     Report of Independent Certified Public Accountants              5

     Consolidated balance sheets - June 1, 1996 and
          June 3, 1995                                               6

     Consolidated statements of earnings - fifty-two weeks
          ended June 1, 1996, fifty-three weeks ended June 3,
          1995 and fifty-two weeks ended May 28, 1994                8

     Consolidated statements of stockholders' equity - fifty-
          two weeks ended June 1, 1996, fifty-three weeks ended
          June 3, 1995 and fifty-two weeks ended May 28, 1994        9

     Consolidated statements of cash flows - fifty-two weeks
          ended June 1, 1996, fifty-three ended June 3, 1995
          and fifty-two weeks ended May 28, 1994                    10

     Notes to consolidated financial statements                     12

(a)  2.  FINANCIAL STATEMENT SCHEDULES

     The following consolidated financial statement schedule
is included in Part IV of this report:

     Schedule II - Valuation and qualifying accounts                35

     All other schedules are omitted because they are not applicable,
or not required, or because the required information is included in the
consolidated financial statements or notes thereto.

(a)  3.  EXHIBITS

      3(i)  Restated certificate of incorporation, as amended       (a)

      3(ii) Amended Bylaws                                          (b)

     10(a)  Agreement and Plan of Merger dated November 7, 1995
            among United States Surgical Corporation, USSC
            Acquisition Corporation, Surgical Dynamics Inc.,
            and E-Z-EM, Inc. and Calmed Laboratories, Inc.
            and E-Z-SUB, Inc.                                       (c)

     10(b)  1983 Stock Option Plan                                  (d)

     10(c)  1984 Directors and Consultants Stock Option Plan        (e)



                                      -2-
<PAGE>
                                                                   Page
                                                                   ----

(a)  3.  EXHIBITS (CONTINUED)

     10(d)  Income Deferral Program                                 (f)

     13     Annual report to security holders                       (g)

     21     Subsidiaries of the Company                             36

     22     Proxy statement to security holders                     (g)

     23     Consent of Independent Certified Public Accountants     37

     27     Financial Data Schedule                                 38

     99(a)  Report of Jacques, Davis, Lefaivre & Associes,
            Independent Certified Public Accountants other than
            Principal Accountants                                   39

     99(b)  Report of Price Waterhouse LLP, Independent Certified
            Public Accountants other than Principal Accountants     40

-------------------

          (a) Incorporated by reference to Exhibit 3(i) of the
              Company's quarterly report filed on Form 10-Q
              for the quarterly period ended December 2, 1995

          (b) Incorporated by reference to Exhibit 3(ii) of the
              Company's annual report filed on Form 10-K for
              the fiscal year ended May 28, 1994

          (c) Incorporated by reference to Exhibit 10 of the
              Company's current report filed on Form 8-K/A
              dated November 22, 1995

          (d) Incorporated by reference to Exhibit 10(a) of the
              Company's quarterly report filed on Form 10-Q for
              the quarterly period ended December 2, 1995

          (e) Incorporated by reference to Exhibit 10(b) of the
              Company's quarterly report filed on Form 10-Q for
              the quarterly period ended December 2, 1995

          (f) Incorporated by reference to Exhibit 10(c) of the
              Company's annual report filed on Form 10-K for
              the fiscal year ended May 29, 1993

          (g) To be filed on a subsequent date

(b)  1.  REPORTS ON FORM 8-K

     No reports on Form 8-K were filed for the quarter ended June 1,
1996.

     Schedules other than those shown above are not submitted as the
subject matter thereof is either not required or is not present in
amounts sufficient to require submission in accordance with the
instructions in Regulation S-X or the information required is included
in the Notes to Consolidated Financial Statements.




                                      -3-
<PAGE>
                               SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.


                                      E-Z-EM, Inc.                     
                                      ---------------------------------
                                      (Registrant)


Date  November 20, 1996               /s/ Dennis J. Curtin             
                                      ---------------------------------
                                      Dennis J. Curtin, Vice President-
                                      Chief Financial Officer






                                      -4-
<PAGE>
           REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors
  E-Z-EM, Inc.

We have audited the accompanying consolidated balance sheets of E-Z-EM,
Inc. and Subsidiaries as of June 1, 1996 and June 3, 1995, and the
related consolidated statements of earnings, stockholders' equity and
cash flows for the fifty-two weeks ended June 1, 1996, the fifty-three
weeks ended June 3, 1995 and the fifty-two weeks ended May 28, 1994.
These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.  We did not audit the
financial statements of a certain subsidiary, which statements reflect
total assets constituting approximately 16% in 1996 and 20% in 1995 and
net sales constituting approximately 12% in 1996, 13% in 1995 and 15%
in 1994 of the related consolidated totals.  We also did not audit the
financial statements of a certain subsidiary for the fifty-two weeks
ended May 28, 1994, for which the results of operations have been
classified as a discontinued operation for all periods presented.
Those statements were audited by other auditors, whose reports thereon
have been furnished to us, and our opinion, insofar as it relates to
the amounts included for these subsidiaries, is based solely upon the
reports of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe
that our audits and the reports of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other
auditors, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of E-Z-EM,
Inc. and Subsidiaries as of June 1, 1996 and June 3, 1995, and the
consolidated results of their operations and their consolidated cash
flows for the fifty-two weeks ended June 1, 1996, the fifty-three weeks
ended June 3, 1995 and the fifty-two weeks ended May 28, 1994, in
conformity with generally accepted accounting principles.

We have also audited the financial statement schedule listed in the
Index at Item 14(a)(2).  In our opinion, this schedule presents fairly,
in all material respects, the information required to be set forth
therein.


                                     GRANT THORNTON LLP
                                     Certified Public Accountants


Melville, New York
August 8, 1996

                                      -5-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

                      CONSOLIDATED BALANCE SHEETS
                             (in thousands)


                                                  June 1,      June 3,
          ASSETS                                   1996         1995  
                                                   ----         ----  

CURRENT ASSETS
  Cash and cash equivalents                      $ 3,363      $ 3,962
  Debt and equity securities                      20,247          485
  Accounts receivable, principally
    trade, net of allowance for
    doubtful accounts of $527 in
    1996 and $465 in 1995                         16,152       17,354
  Inventories                                     23,708       22,752
  Other current assets                             2,936        2,602
                                                 -------      -------

      Total current assets                        66,406       47,155

PROPERTY, PLANT AND EQUIPMENT - AT COST,
  less accumulated depreciation and
  amortization                                    21,823       20,864

COST IN EXCESS OF FAIR VALUE OF NET
  ASSETS ACQUIRED, less accumulated
  amortization of $411 in 1996 and
  $354 in 1995                                       558          633

INTANGIBLE ASSETS, less accumulated
  amortization of $345 in 1996 and
  $492 in 1995                                       767          463

DEBT AND EQUITY SECURITIES                         3,647        4,352

OTHER ASSETS                                       2,836        2,628
                                                 -------      -------

                                                 $96,037      $76,095
                                                 =======      =======



The accompanying notes are an integral part of these statements.


                                      -6-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

                      CONSOLIDATED BALANCE SHEETS
            (in thousands, except share and per share data)


                                                  June 1,      June 3,
   LIABILITIES AND STOCKHOLDERS' EQUITY            1996         1995  
                                                   ----         ----  

CURRENT LIABILITIES
  Notes payable                                  $   979      $ 1,021
  Current maturities of long-term debt               268          208
  Accounts payable                                 5,095        6,713
  Accrued liabilities                              6,218        5,559
  Accrued income taxes                               338          400
                                                 -------      -------

      Total current liabilities                   12,898       13,901

LONG-TERM DEBT, less current maturities              680        1,114

OTHER NONCURRENT LIABILITIES                       1,856        1,805

MINORITY INTEREST IN SUBSIDIARY                                 1,385

COMMITMENTS AND CONTINGENCIES                                        
                                                 -------      -------

      Total liabilities                           15,434       18,205
                                                 -------      -------

STOCKHOLDERS' EQUITY
  Preferred stock, par value $.10 per share -
    authorized, 1,000,000 shares; issued, none        -            -
  Common stock
    Class A (voting), par value $.10 per
      share - authorized, 6,000,000 shares;
      issued and outstanding, 4,035,346 shares
      in 1996 and 4,032,532 shares in 1995           403          403
    Class B (nonvoting), par value $.10 per
      share - authorized, 10,000,000 shares;
      issued and outstanding, 5,199,615
      shares in 1996 and 4,785,462 shares
      in 1995                                        520          479
  Additional paid-in capital                      15,165       11,570
  Retained earnings                               63,347       44,953
  Unrealized holding gain on debt and equity
    securities                                     2,360        1,786
  Cumulative translation adjustments              (1,192)      (1,301)
                                                 -------      -------

      Total stockholders' equity                  80,603       57,890
                                                 -------      -------

                                                 $96,037      $76,095
                                                 =======      =======

The accompanying notes are an integral part of these statements.



                                      -7-
<PAGE>
                       E-Z-EM, Inc. and Subsidiaries

                    CONSOLIDATED STATEMENTS OF EARNINGS
                   (in thousands, except per share data)

                                       Fifty-two  Fifty-three  Fifty-two
                                      weeks ended weeks ended weeks ended
                                        June 1,     June 3,     May 28,
                                         1996        1995*       1994* 
                                       -------     -------     -------

Net sales                              $91,932     $88,526     $85,645

Cost of goods sold                      55,518      51,845      52,028
                                       -------     -------     -------

      Gross profit                      36,414      36,681      33,617
                                       -------     -------     -------

Operating expenses
  Selling and administrative            30,134      27,767      25,520
  Research and development               5,323       6,077       6,897
                                       -------     -------     -------

    Total operating expenses            35,457      33,844      32,417
                                       -------     -------     -------

      Operating profit                     957       2,837       1,200

Other income (expense)
  Interest income                          735         551         429
  Interest expense                        (264)       (286)       (386)
  Other, net                               512         457         285
                                       -------     -------     -------

      Earnings from continuing
        operations before income taxes   1,940       3,559       1,528

Income tax provision                       243       1,086       1,149
                                       -------     -------     -------

      Earnings from continuing
        operations                       1,697       2,473         379

Discontinued operation:
  Losses from operations, net of
    income tax provision (benefit)
    of $10, $142 and $(261) in 1996,
    1995 and 1994, respectively           (209)       (843)       (102)
  Gain on sale, net of income tax
    provision of $6,019                 19,520                        
                                       -------     -------     -------

      NET EARNINGS                     $21,008     $ 1,630     $   277
                                       =======     =======     =======
Primary earnings per common share
  Continuing operations                $   .17     $   .27     $   .04
  Discontinued operation                  1.99        (.09)       (.01)
  Total operations                        2.16         .18         .03
Fully diluted earnings per common share
  Continuing operations                $   .17     $   .27     $   .04
  Discontinued operation                  1.97        (.09)       (.01)
  Total operations                        2.14         .18         .03

* Reclassified to reflect the discontinued operation.

The accompanying notes are an integral part of these statements.


                                      -8-
<PAGE>
                          E-Z-EM, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

           Fifty-two weeks ended June 1, 1996, fifty-three weeks ended
               June 3, 1995 and fifty-two weeks ended May 28, 1994
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                           Unrealized
                                   Class A            Class B                             holding gain
                                 common stock       common stock    Additional              on debt     Cumulative 
                                 ------------       ------------     paid-in    Retained   and equity   translation    
                                Shares   Amount    Shares   Amount   capital    earnings   securities   adjustments   Total 
                                ------   ------    ------   ------   -------    --------   ----------   -----------   ----- 

<S>                           <C>         <C>    <C>         <C>     <C>        <C>          <C>        <C>          <C>    
Balance at May 29, 1993       4,032,533   $403   4,275,175   $428    $ 9,248    $45,399      $  -       $  (477)     $55,001

Issuance of stock                    (1)             4,479                22                                              22
3% common stock dividend                           249,026     25      1,235     (1,262)                                  (2)
Net earnings                                                                        277                                  277
Foreign currency translation
  adjustments                                                                                            (1,029)      (1,029)
                              ---------   ----   ---------   ----    -------    -------      ------     -------      -------

Balance at May 28, 1994       4,032,532    403   4,528,680    453     10,505     44,414         -        (1,506)      54,269

Unrealized holding gain on
  debt and equity securities
  at May 29, 1994                                                                             3,531                    3,531
Issuance of stock                                      270                 1                                               1
3% common stock dividend                           256,512     26      1,064     (1,091)                                  (1)
Net earnings                                                                      1,630                                1,630
Unrealized holding loss on
  debt and equity securities                                                                 (1,745)                  (1,745)
Foreign currency translation
  adjustments                                                                                               205          205
                              ---------   ----   ---------   ----    -------    -------      ------     -------      -------

Balance at June 3, 1995       4,032,532    403   4,785,462    479     11,570     44,953       1,786      (1,301)      57,890

Exercise of stock options         2,813            145,369     14      1,005                                           1,019
Issuance of stock                     1                933                 5                                               5
3% common stock dividend                           267,851     27      2,585     (2,614)                                  (2)
Net earnings                                                                     21,008                               21,008
Unrealized holding gain on
  debt and equity securities                                                                    574                      574
Foreign currency translation
  adjustments                                                                                               109          109
                              ---------   ----   ---------   ----    -------    -------      ------     -------      -------

Balance at June 1, 1996       4,035,346   $403   5,199,615   $520    $15,165    $63,347      $2,360     $(1,192)     $80,603
                              =========   ====   =========   ====    =======    =======      ======     =======      =======
</TABLE>

The accompanying notes are an integral part of these statements.


                                      -9-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (in thousands)

 
                                       Fifty-two  Fifty-three  Fifty-two
                                      weeks ended weeks ended weeks ended
                                        June 1,     June 3,     May 28,
                                         1996        1995        1994  
                                        ------      ------      ------

Cash flows from operating activities:
  Net earnings                         $21,008      $1,630      $  277
  Adjustments to reconcile net
    earnings to net cash (used in)
    provided by operating activities
      Depreciation and amortization      2,552       2,800       2,728
      Gain on disposal of business     (25,539)
      Gain on sale of assets              (193)
      Gain on sale of investments                                  (24)
      Minority share of subsidiary's
        operations                        (200)       (810)        (97)
      Deferred income taxes                 60         282         (61)
      Changes in operating assets
        and liabilities, net of
        disposition
          Accounts receivable             (731)        233      (1,077)
          Inventories                   (3,123)     (3,833)      1,637
          Other current assets            (446)       (305)        372
          Other assets                    (754)        128        (116)
          Accounts payable                (312)      2,319         616
          Accrued liabilities              905         312        (960)
          Accrued income taxes              22        (107)       (309)
          Other noncurrent liabilities     168         190          36
                                        ------      ------      ------

            Net cash (used in) provided
              by operating activities   (6,583)*     2,839       3,022
                                        ------      ------      ------

Cash flows from investing activities:
  Additions to property, plant and
    equipment, net                      (4,231)     (4,812)     (2,175)
  Proceeds from disposal of business,
    net of cash sold                    26,785
  Proceeds from sale of assets             485
  Held-to-maturity securities
    Purchases                         (104,253)     (1,958)
    Proceeds from maturity             105,846       1,964           6
  Available-for-sale securities
    Purchases                          (39,750)        (31)       (793)
    Proceeds from sale                  19,995                     844
                                        ------      ------      ------

      Net cash provided by (used in)
        investing activities             4,877      (4,837)     (2,118)
                                        ------      ------      ------

* Includes income taxes paid on the disposition of Surgical Dynamics
  Inc. of approximately $6,019.

The accompanying notes are an integral part of these statements.


                                      -10-
<PAGE>

                     E-Z-EM, Inc. and Subsidiaries

           CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                             (in thousands)

 
                                       Fifty-two  Fifty-three  Fifty-two
                                      weeks ended weeks ended weeks ended
                                        June 1,     June 3,     May 28,
                                         1996        1995        1994  
                                        ------      ------      ------

Cash flows from financing activities:
  Proceeds from issuance of debt       $ 1,121      $1,686      $  892
  Repayments of debt                      (910)     (3,374)     (1,254)
  Proceeds from issuance of loan
    by minority shareholder                238         258
  Proceeds from exercise of stock
    options                              1,019
  Issuance of stock in connection with
    the stock purchase plan                  5           1          22
                                        ------      ------      ------

      Net cash provided by (used in)
        financing activities             1,473      (1,429)       (340)
                                        ------      ------      ------

Effect of exchange rate changes on
  cash and cash equivalents               (366)        538        (767)
                                        ------      ------      ------

      DECREASE IN CASH AND CASH
        EQUIVALENTS                       (599)     (2,889)       (203)

Cash and cash equivalents
  Beginning of year                      3,962       6,851       7,054
                                        ------      ------      ------

  End of year                           $3,363      $3,962      $6,851
                                        ======      ======      ======

Supplemental disclosures of cash
  flow information:
    Cash paid during the year for:
      Interest                          $  136      $  201      $  360
                                        ======      ======      ======

      Income taxes (net of $508,
        $449 and $263 in refunds
        in 1996, 1995 and 1994,
        respectively)                   $6,319      $  674      $1,050
                                        ======      ======      ======


The accompanying notes are an integral part of these statements.


                                      -11-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  The summary of significant accounting policies is presented to assist
    the reader in understanding and evaluating the consolidated
    financial statements.  These policies are in conformity with
    generally accepted accounting principles and have been applied
    consistently in all material respects.

  Basis Of Consolidation
  ----------------------

  The consolidated financial statements include the accounts of E-Z-EM,
    Inc. and all 100%-owned subsidiaries, as well as the accounts of
    Surgical Dynamics Inc. ("SDI"), a 51%-owned subsidiary prior to its
    sale in November 1995 (the "Company").  SDI has been reported as a
    discontinued operation and, accordingly, the gain from the sale of
    SDI and the Company's proportionate share of losses from operations
    of SDI have been classified as a discontinued operation for all
    periods presented in the accompanying consolidated statements of
    earnings.  The discontinued operation has not been segregated in
    the accompanying statements of consolidated cash flows and,
    therefore, amounts for certain captions will not agree with the
    respective consolidated statements of earnings.  The Company is
    primarily engaged in developing, manufacturing and marketing
    diagnostic products used by radiologists and other physicians
    during image-assisted procedures to detect physical abnormalities
    and diseases.

  Operations outside the U.S. are included in the consolidated
    financial statements and consist of:  a subsidiary operating a
    mining and chemical processing operation in Nova Scotia, Canada and
    a manufacturing and marketing facility in Montreal, Canada; a
    subsidiary manufacturing products located in Puerto Rico; a
    subsidiary manufacturing and marketing products located in Japan; a
    subsidiary promoting and distributing products located in Holland;
    and a subsidiary promoting and distributing products located in the
    United Kingdom.

  Fiscal Year
  -----------

  The Company reports on a fiscal year which concludes on the Saturday
    nearest to May 31.  Fiscal year 1996 ended on June 1, 1996 for a
    reporting period of fifty-two weeks, fiscal year 1995 ended on June
    3, 1995 for a reporting period of fifty-three weeks and fiscal
    year 1994 ended on May 28, 1994 for a reporting period of fifty-two
    weeks.
 
  Cash and Cash Equivalents
  -------------------------

  The Company considers all unrestricted highly liquid investments
    purchased with a maturity of less than three months to be cash
    equivalents.  Included in cash equivalents are certificates of



                                      -12-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
    deposit and Eurodollar investments of $1,796,000 and $1,133,000 at
    June 1, 1996 and June 3, 1995, respectively.  The carrying amount
    of these financial instruments reasonably approximates fair value
    because of their short maturity.  Foreign-denominated cash and cash
    equivalents aggregated $1,101,000 and $1,695,000 at June 1, 1996
    and June 3, 1995, respectively.

  Debt and Equity Securities
  --------------------------

  Effective in fiscal 1995, the Company adopted Statement of Financial
    Accounting Standards No. 115, "Accounting for Certain Investments
    in Debt and Equity Securities" ("SFAS 115").  In accordance with
    the provisions of SFAS 115, this Statement was not applied
    retroactively to financial statements prior to fiscal 1995.

  Pursuant to SFAS 115, debt and equity securities are to be classified
    in three categories and accounted for as follows:  debt securities
    that the Company has the positive intent and ability to hold to
    maturity are classified as "held-to-maturity securities" and
    reported at amortized cost; debt and equity securities that are
    bought and held principally for the purpose of selling them in the
    near term are classified as "trading securities" and reported at
    fair value, with unrealized gains and losses included in
    operations; and debt and equity securities not classified as either
    held-to-maturity securities or trading securities are classified as
    "available-for-sale securities" and reported at fair value, with
    unrealized gains and losses excluded from operations and reported
    as a separate component of stockholders' equity, net of the related
    tax effects.  Cost is determined using the specific identification
    method.
 
  Inventories
  -----------

  Inventories are stated at the lower of cost (on the first-in, first-
    out method) or market.  Appropriate consideration is given to
    deterioration, obsolescence and other factors in evaluating net
    realizable value.

  Property, Plant and Equipment
  -----------------------------

  Property, plant and equipment are stated at cost, less accumulated
    depreciation.  Depreciation is computed principally using the
    straight-line method over the estimated useful lives of the assets.
    Leasehold improvements are amortized over the terms of the related
    leases or the useful life of the improvements, whichever is
    shorter.  Expenditures for repairs and maintenance are charged to
    expense as incurred.  Renewals and betterments are capitalized.
    Depreciation expense from continuing operations was $2,308,000,
    $2,273,000 and $2,230,000 in 1996, 1995 and 1994, respectively.




                                      -13-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
  Cost in Excess of Fair Value of Net Assets Acquired
  ---------------------------------------------------

  The excess cost is being amortized on a straight-line basis over 5
    and 40 year periods.  On an ongoing basis, management reviews the
    valuation and amortization of this asset to determine possible
    impairment by comparing the carrying value to the undiscounted
    future cash flows of the related asset.  Amortization from
    continuing operations was $73,000, $70,000 and $65,000 in 1996,
    1995 and 1994, respectively.

  Intangible Assets
  -----------------

  Intangible assets are being amortized on a straight-line basis over
    the estimated useful lives of the respective assets ranging from
    five to fifteen and one-half years.  Amortization from continuing
    operations was $47,000, $44,000 and $41,000 in 1996, 1995 and 1994,
    respectively.

  In March 1995, the Financial Accounting Standards Board issued
    Statement of Financial Accounting Standards No. 121 ("SFAS 121")
    that established accounting standards for the impairment of long-
    lived assets, certain intangibles and goodwill related to those
    assets to be held and used, and for long-lived assets and certain
    identifiable intangibles to be disposed of.  SFAS 121 is required
    to be adopted for fiscal years beginning after December 15, 1995.
    In accordance with SFAS 121, it is the Company's policy to
    periodically review and evaluate whether there has been a permanent
    impairment in the value of intangibles and adjust the carrying
    value accordingly.  Factors considered in the valuation include
    current operating results, trends and anticipated undiscounted
    future cash flows.  Accordingly, the adoption of SFAS 121 is not
    expected to have a significant effect on the consolidated financial
    statements of the Company.

  Income Taxes
  ------------

  In accordance with Statement of Financial Accounting Standards No.
    109, "Accounting for Income Taxes" ("SFAS 109"), deferred income
    taxes are recognized for temporary differences between financial
    statement and income tax bases of assets and liabilities and loss
    carryforwards and tax credit carryforwards for which income tax
    benefits are expected to be realized in future years.  A valuation
    allowance has been established to reduce deferred tax assets as it
    is more likely than not that all, or some portion, of such deferred
    tax assets will not be realized.  The effect on deferred taxes of a
    change in tax rates is recognized in income in the period that
    includes the enactment date.


                                      -14-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 
  Foreign Currency Translation
  ----------------------------

  In accordance with Statement of Financial Accounting Standards No.
    52, "Foreign Currency Translation," the Company has determined that
    the functional currency for each of its foreign subsidiaries is the
    local currency.  This assessment considers that the day-to-day
    operations are not dependent upon the economic environment of the
    parent's functional currency, financing is effected through their
    own operations, and the foreign operations primarily generate and
    expend foreign currency.  Foreign currency translation adjustments
    are accumulated as a separate component of stockholders' equity.

  Earnings Per Common Share
  -------------------------

  Primary and fully diluted earnings per common share are computed on
    the basis of the weighted average number of common shares
    outstanding plus the common stock equivalents which would arise
    from the exercise of stock options, if the latter causes dilution
    in earnings per common share in excess of 3%.  Common stock
    equivalents are included in both the primary and fully diluted
    calculations for 1996, 1995 and 1994.

  The weighted average number of common shares used was:

                                     1996         1995         1994
                                     ----         ----         ----
    Primary                       9,723,626    9,087,678    9,081,038
    Fully diluted                 9,832,676    9,092,403    9,081,084

  The weighted average number of common shares and the per share
    amounts for all periods presented have been retroactively restated
    to reflect the total shares issued after the 3% stock dividends
    described in Note K.
 
  Stock-Based Compensation
  ------------------------

  Adoption of Statement of Financial Accounting Standards No. 123,
    "Accounting for Stock-Based Compensation" ("SFAS 123") is required
    for fiscal years beginning after December 15, 1995 and allows for a
    choice of the method of accounting used for stock-based
    compensation.  Entities may elect the "intrinsic value" method
    based on APB No. 25 "Accounting for Stock Issued to Employees" or
    the new "fair value" method contained in SFAS 123.  The Company
    intends to implement SFAS 123 in fiscal 1997 by continuing to
    account for stock-based compensation under the guidelines of APB
    No. 25.  As required by SFAS 123, the pro forma effects on net
    earnings and earnings per common share will be determined as if the
    fair value based method had been applied and disclosed in the notes
    to the consolidated financial statements.


                                      -15-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

  Use of Estimates
  ----------------

  The preparation of financial statements in conformity with generally
    accepted accounting principles requires management to make
    estimates and assumptions that affect the reported amounts of
    assets and liabilities and disclosures of contingent assets and
    liabilities at year-end and the reported amounts of revenues and
    expenses during the reporting period.  Actual results could differ
    from those estimates.

  Reclassifications
  -----------------

  Certain reclassifications have been made to the prior year amounts to
    conform to the 1996 presentation.
 

NOTE B - DISCONTINUED OPERATION

  On November 22, 1995 (the "Closing Date"), E-Z-EM, Inc. completed the
    sale of all of the capital stock of SDI held by E-Z-EM, Inc.
    through its subsidiary, E-Z-SUB, Inc., (collectively, the
    "Company") to United States Surgical Corporation ("USSC") pursuant
    to the terms of an Agreement and Plan of Merger Agreement dated
    November 7, 1995 (the "Merger Agreement") by and among USSC, USSC
    Acquisition Corporation, SDI, CalMed Laboratories, Inc. ("CalMed")
    and the Company.  As of the Closing Date, the Company owned 51%
    (approximately 47% on a fully diluted basis after taking into
    account outstanding options) of the outstanding capital stock of
    SDI and CalMed, a company not affiliated with E-Z-EM, Inc., owned
    49% (approximately 45% on a fully diluted basis after taking into
    account outstanding options) of the outstanding capital stock of
    SDI.  The aggregate consideration paid for SDI was $59,900,000 in
    cash, which amount included repayment by USSC of $200,000 of loans
    owed by SDI to its shareholders.  After closing costs and payments
    made to option holders, the Company received, at closing, cash
    proceeds of $27,073,000 for the sale of its interest in SDI.  In
    addition, $510,000 of the consideration payable to the Company is
    being held back by USSC as a nonexclusive source of indemnification
    for breaches of representations and warranties, and to the extent
    not drawn upon, will be repaid to the Company two years after the
    Closing Date.  As a result of this sale, the Company recognized a
    gain, pretax, of approximately $25,539,000, after-tax of
    approximately $19,520,000, or $2.01 per common share on a primary
    basis.  The effective tax rate of 24% on the gain on the sale of
    SDI differs from the Federal statutory tax rate of 35% due
    primarily to the utilization of previously unrecorded tax loss and
    tax credit carryforwards.


                                      -16-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994

 
NOTE B - DISCONTINUED OPERATION (continued)

  SDI is a manufacturer of minimally invasive surgical devices for the
    spine, including the NucleotomeTM for use in percutaneous
    diskectomy and the Ray Threaded Fusion CageTM spine implants for
    use in interbody fusions.

  SDI has been reported as a discontinued operation and, accordingly,
    the gain from the sale of SDI and the Company's proportionate share
    of losses from operations of SDI have been classified as a
    discontinued operation for all periods presented in the
    accompanying consolidated statements of earnings.  Revenues
    attributable to the SDI operations were approximately $3,475,000
    for the period June 4, 1995 through November 22, 1995 and
    $9,071,000 and $8,478,000 for the fiscal years ended June 3, 1995
    and May 28, 1994.  Changes in operating assets and liabilities
    reflected in the consolidated statements of cash flows include
    amounts pertaining to the operations of SDI.


NOTE C - DEBT AND EQUITY SECURITIES

  Debt and equity securities at June 1, 1996 consist of the following:

                                                             Unrealized
                                    Amortized      Fair        holding
                                      cost        value      gain (loss)
                                    -------      -------       ------ 
                                              (in thousands)
    Current

      Available-for-sale securities
        (carried on the balance
        sheet at fair value)
          Debt securities           $19,787      $19,776       $  (11)
          Equity securities             398          376          (13)
          Other                          95           95             
                                    -------      -------       ------ 

                                    $20,280      $20,247       $  (24)
                                    =======      =======       ====== 

    Noncurrent

      Available-for-sale securities
        (carried on the balance
        sheet at fair value)
          Equity securities          $1,675       $3,646       $1,971
          Other                           1            1             
                                    -------      -------       ------ 

                                     $1,676       $3,647       $1,971
                                    =======      =======       ====== 


                                      -17-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994



NOTE C - DEBT AND EQUITY SECURITIES (continued)

  Debt and equity securities at June 3, 1995 consist of the following:

                                                             Unrealized
                                    Amortized      Fair        holding
                                      cost        value      gain (loss)
                                     ------       ------       ------
                                              (in thousands)
    Current

      Held-to-maturity securities
        (carried on the balance
        sheet at amortized cost)
          Debt securities            $   75       $   75
                                     ------       ------

      Available-for-sale securities
        (carried on the balance
        sheet at fair value)
          Equity securities             398          357       $  (31)
          Other                          53           53             
                                     ------       ------       ------

                                        451          410          (31)
                                     ------       ------       ------

                                     $  526       $  485       $  (31)
                                     ======       ======       ======

    Noncurrent

      Held-to-maturity securities
        (carried on the balance
        sheet at amortized cost)
          Debt securities with
            maturities after one
            year through five years  $1,593       $1,605
                                     ------       ------

      Available-for-sale securities
        (carried on the balance
        sheet at fair value)
          Equity securities           1,670        2,758       $1,088
          Other                           1            1             
                                     ------       ------       ------

                                      1,671        2,759        1,088
                                     ------       ------       ------

                                     $3,264       $4,364       $1,088
                                     ======       ======       ======


                                      -18-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE D - INVENTORIES

  Inventories consist of the following:

                                                  June 1,      June 3,
                                                   1996         1995  
                                                   ----         ----  
                                                     (in thousands)

    Finished goods                               $13,157      $11,856
    Work in process                                1,159        2,214
    Raw materials                                  9,392        8,682
                                                 -------      -------

                                                 $23,708      $22,752
                                                 =======      =======


NOTE E - PROPERTY, PLANT AND EQUIPMENT, AT COST

  Property, plant and equipment are summarized as follows:

                                   Estimated
                                    useful        June 1,      June 3,
                                     lives         1996         1995  
                                     -----         ----         ----  
                                                     (in thousands)

    Building and building
      improvements              10 to 39 years   $11,661      $11,176
    Machinery and equipment      2 to 10 years    24,008       23,897
    Leasehold improvements       Term of lease     1,568        1,816
                                                 -------      -------

                                                  37,237       36,889
    Less accumulated depreciation
      and amortization                            18,903       19,709
                                                 -------      -------

                                                  18,334       17,180
    Land                                           3,489        3,684
                                                 -------      -------

                                                 $21,823      $20,864
                                                 =======      =======




                                      -19-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE F - INCOME TAXES

  Income tax expense (benefit) from continuing operations analyzed by
    category and by income statement classification is summarized as
    follows:

                                      1996         1995         1994 
                                     ------       ------       ------
                                              (in thousands)
    Current
      Federal                        $  413       $    1       $    1
      State and local                    31           60           59
      Foreign                          (261)         877        1,015
                                     ------       ------       ------

        Subtotal                        183          938        1,075

    Deferred                             60          148           74
                                     ------       ------       ------

        Total                        $  243       $1,086       $1,149
                                     ======       ======       ======

  Temporary differences which give rise to deferred tax assets and
    liabilities are summarized as follows:

                                                  June 1,      June 3,
                                                   1996         1995  
                                                   -----        -----
                                                     (in thousands)
    Deferred tax assets
      Difference between book and tax basis
        in investment sold to Canadian
        subsidiary                                $1,137       $1,137
      Tax credit carryforwards                       638        1,295
      Tax operating loss carryforwards               372        3,767
      Capital loss carryforwards                                  453
      Alternative minimum tax ("AMT")
        credit carryforward                                       165
      Expenses incurred not currently
        deductible                                 1,191        1,455
      Unrealized investment losses                   722          877
      Deferred compensation costs                    547          487
      Inventories                                    291          243
      Other                                           89           67
                                                   -----        -----

        Gross deferred tax asset                   4,987        9,946
                                                   -----        -----



                                      -20-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE F - INCOME TAXES (continued)

                                                  June 1,      June 3,
                                                   1996         1995  
                                                  ------       ------
                                                     (in thousands)
    Deferred tax liabilities
      Excess tax over book depreciation           $1,074       $  914
      Unrealized investment gains                    305          144
      Tax on unremitted profits of Puerto
        Rican subsidiary                              67          145
      Other                                           86          109
                                                  ------       ------

        Gross deferred tax liability               1,532        1,312

    Valuation allowance                           (3,040)      (7,861)
                                                  ------       ------

        Net deferred tax asset                    $  415       $  773
                                                  ======       ======

  In 1994, the Company sold to its Canadian subsidiary warrants to
    purchase 396,396 shares of stock in ISG Technologies, Inc.  This
    transaction generated a capital gain for tax purposes of
    approximately $3,344,000, utilizing a portion of the Company's
    capital loss carryforward and giving rise to a temporary difference
    pertaining to the difference between the financial statement and
    tax basis in this asset.

  During 1996, the Company utilized tax operating and capital losses,
    tax credit and AMT credit carryforwards of approximately
    $8,279,000, $596,000 and $121,000, respectively, in connection with
    the sale of SDI described in Note B.

  If not utilized, the tax operating loss carryforwards will expire in
    various amounts over the years 1997 through 2010.  The tax credit
    carryforwards will expire in various amounts over the years 1997
    through 2003.

  Deferred income taxes are provided for the expected Tollgate tax on
    the undistributed earnings of the Company's Puerto Rican
    subsidiary, which are expected to be distributed at some time in
    the future.




                                      -21-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE F - INCOME TAXES (continued)

  At June 1, 1996, undistributed earnings of certain foreign
    subsidiaries aggregated $13,339,000 which will not be subject to
    U.S. tax until distributed as dividends.  Any taxes paid to foreign
    governments on these earnings may be used, in whole or in part, as
    credits against the U.S. tax on any dividends distributed from such
    earnings.  It is not practical to estimate the amount of U.S. tax,
    if any, that might be payable on the eventual remittance of such
    earnings.  On remittance, certain foreign countries impose
    withholding taxes that are then available for use as credits
    against a U.S. tax liability, if any, subject to certain
    limitations.  The amount of withholding tax that would be payable
    on remittance of the entire amount of undistributed earnings would
    approximate $667,000.  Under the provisions of the Omnibus Budget
    Reconciliation Act of 1993, undistributed earnings of foreign
    subsidiaries may be taxable in certain situations for fiscal years
    beginning after September 30, 1993.

  Deferred tax assets and liabilities are included in the consolidated
    balance sheets as follows:

                                                   June 1,      June 3,
                                                    1996         1995  
                                                   -------      -------
                                                     (in thousands)

      Current - Accrued income taxes               $(118)       $(220)
      Noncurrent - Other assets                      533          993
                                                   -----        -----

        Net deferred tax asset                     $ 415        $ 773
                                                   =====        =====

  Earnings (loss) from continuing operations before income taxes for
    U.S. and international operations consist of the following:

                                      1996         1995         1994 
                                     ------       ------      -------
                                              (in thousands)

      U.S.                           $2,280       $  805      $(1,563)
      International                    (340)       2,754        3,091
                                     ------       ------      -------

                                     $1,940       $3,559      $ 1,528
                                     ======       ======      =======




                                      -22-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE F - INCOME TAXES (continued)

  The Company's consolidated income tax provision has differed from the
    amount which would be provided by applying the U.S. Federal
    statutory income tax rate to the Company's earnings from continuing
    operations before income taxes for the following reasons:

                                      1996         1995         1994 
                                     ------       ------       ------
                                              (in thousands)

    Income tax provision               $243       $1,086       $1,149
    Effect of:
      State income taxes, net of
        Federal tax benefit             (21)         (22)         (19)
      Research and development credit    95           24           11
      Earnings of the Puerto Rican
        subsidiary, net of Puerto
        Rico Corporate tax and
        Tollgate tax                    348          373          367
      Earnings of the Foreign Sales
        Corporation                      16
      Tax-exempt portion of
        investment income               137            7           13
      Nondeductible expenses           (251)        (138)         (53)
      Losses of entities generating
        no current tax benefit          (79)         (83)      (1,034)
      Utilization of tax operating
        and capital loss
        carryforwards                    61                        50
      Change in valuation allowance      74
      Other                              56          (37)          36

                                       ----       -------      ------

    Income tax provision at
      statutory tax rate of 35% in
      1996 and 34% in 1995 and 1994    $679       $1,210       $  520
                                       ====       ======       ======

  The Company has an agreement with the Commonwealth of Puerto Rico
    pursuant to which its operations in Puerto Rico are subject to a
    partial tax exemption which expires January 23, 2007.  Commonwealth
    taxes are currently being provided on earnings of the subsidiary.

  The U.S. Federal income tax returns of the Company through May 30,
    1992 have been closed by the Internal Revenue Service.


                                      -23-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE G - DEBT

  Short-term debt consists of the following:

                                                  June 1,      June 3,
                                                   1996         1995  
                                                  -------      -------
                                                     (in thousands)

    Japanese bank
      2.63% note (1)                                $462
      4.00% note (1)                                           $  607
    Bank, lines of credit
      6.5% (2)                                       287
      10.75%                                                      150
    Other financial institutions
      6.12% note, unsecured                          230
      6.37% note, unsecured                                       264
                                                    ----       ------

                                                    $979       $1,021
                                                    ====       ======

  Long-term debt consists of the following:

                                                  June 1,      June 3,
                                                   1996         1995  
                                                  -------      -------
                                                     (in thousands)

    Japanese bank loans, due December 1998
      through March 2001, 1.45% to 4.10% (1)        $948       $1,277
    Obligations under capital leases                               45
                                                    ----       ------

                                                     948        1,322
    Less current maturities                          268          208
                                                    ----       ------

                                                    $680       $1,114
                                                    ====       ======

  (1) Collateralized by property, plant and equipment having a net
      carrying value of $1,900,000 at June 1, 1996.

  (2) The Company's Canadian subsidiary has available $730,600
      (Canadian $1,000,000) under this line of credit with a bank,
      which is collateralized by accounts receivable and expires on
      September 30, 1996.

  The Company has available $4,000,000 under an unsecured line of
    credit with a bank, which expires on November 30, 1996.  At June 1,
    1996, no amounts were outstanding under this line of credit.


                                      -24-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE G - DEBT (continued)

  The Company believes that the carrying amount of its debt
    approximates the fair value as the variable interest rates
    approximate current prevailing interest rates.

  During 1996 and 1995, the weighted average interest rates on short-
    term debt were 5.93% and 5.48%, respectively.


NOTE H - ACCRUED LIABILITIES

  Accrued liabilities consist of the following:

                                                  June 1,      June 3,
                                                   1996         1995  
                                                  ------       ------
                                                     (in thousands)

    Payroll and related expenses                  $3,146       $3,341
    Accrued sales rebates                          1,040          370
    Accrued lease settlement (Note J)                510          600
    Other                                          1,522        1,248
                                                  ------       ------

                                                  $6,218       $5,559
                                                  ======       ======


NOTE I - RETIREMENT PLANS

  E-Z-EM, Inc. and certain domestic subsidiaries ("E-Z-EM") provide
    pension benefits through a Profit-Sharing Plan, under which E-Z-EM
    makes discretionary contributions to eligible employees, and a
    companion 401(k) Plan, under which eligible employees can defer a
    portion of their annual compensation, part of which is matched by
    E-Z-EM.  These plans cover all E-Z-EM employees not otherwise
    covered by collective bargaining agreements.  In 1996, 1995 and
    1994, profit-sharing contributions were $468,000, $464,000 and
    $457,000, respectively, and 401(k) matching contributions were
    $316,000, $292,000 and $274,000, respectively.

  E-Z-EM Canada Inc., a wholly-owned subsidiary of the Company, also
    provides pension benefits to eligible employees through a Defined
    Contribution Plan.  In 1996, 1995 and 1994, contributions were
    $45,000, $53,000 and $88,000, respectively.



                                      -25-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE J - COMMITMENTS AND CONTINGENCIES

  The Company is presently a defendant in a product liability action.
    This suit claims damages based upon alleged injuries resulting from
    the use of one of the Company's products.  The action is in its
    early stages and while the Company is actively defending against
    the claim, it is unable to predict its outcome.  It should be noted
    that in this action the Company is one among several defendants
    and, as such, the Company's liability, if any, is not quantifiable
    at this time.  The Company does not believe that the ultimate
    outcome in this action will have a material adverse effect on the
    consolidated financial statements.

  The Company was the defendant in a product liability action with
    respect to an alleged injury resulting from the use of one of its
    products.  The Company was dismissed without prejudice from such
    action in February 1996.

  Pursuant to a contractual agreement with Picker International, Inc.
    ("Picker"), the Company assumed the defense of a lawsuit in which
    Picker, along with multiple other named defendants, had been sued
    for injuries alleged to have resulted from the use of protective
    aprons.  The plaintiff has recently abandoned this action.

  The Company has been sued by Olympia Holding Corporation p/k/a P-I-E
    Nationwide, Inc. for $443,830.  The suit, filed on October 5, 1992,
    is presently pending in the U.S. Bankruptcy Court for the Middle
    District of Florida.  The Company is being represented in this
    action by a law firm which is also representing numerous other
    defendants being sued by the same plaintiff on the same grounds -
    recovery for alleged undercharges for freight carriage.  It is not
    possible, at this stage, to determine what, if any, liability
    exists with respect to the Company in this matter.  The Company
    will vigorously defend against this action; it has been informed by
    legal counsel that there exist numerous valid defenses to this
    case.

  During 1993, SDI's lease agreement on the Alameda, California, office
    and production facilities was prematurely terminated by SDI, a
    former 51%-owned subsidiary of the Company.  In 1993, SDI accrued
    $600,000 for the estimated settlement of the lease commitment.
    Pursuant to the terms of the Merger Agreement described in Note B,
    the $600,000 liability was assumed by USSC (the purchaser of SDI),
    and the Company and the previous minority shareholder of SDI
    assumed any liability in excess of $600,000 in connection with the
    lease termination.  The dispute was settled in July 1996 for
    $1,600,000, of which the Company was liable for $510,000, or 51% of
    the $1,000,000 excess.  Such amount is included in accrued
    liabilities at June 1, 1996.
 



                                      -26-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE J - COMMITMENTS AND CONTINGENCIES (continued)
 
  During March 1994, the Company began recalling its effervescent
    granules and colon cleansing products due to packaging and
    formulation problems, which might have resulted in inconsistent
    product performance over time.  The recalls were initiated by the
    Company's desire to ensure complete product efficacy, as patient
    safety issues were not involved.  The Company recorded a pretax
    provision in the aggregate amount of $1,546,000 during 1994, with
    respect to such recalls.  During 1995, such recall was completed
    and the Company reduced this provision by $156,000 based upon the
    actual results of the recall.  Such amounts are reflected in cost
    of goods sold in the consolidated statements of earnings.  These
    products currently account for less than five percent of the
    Company's sales volume.

  The Company leases several facilities from related parties.  During
    1996, 1995 and 1994, aggregate rental costs under all operating
    leases from continuing operations, which primarily consist of
    facility rentals, were approximately $1,131,000, $1,041,000 and
    $1,288,000, respectively, of which approximately $202,000, $205,000
    and $198,000 were paid to related parties.  Future annual
    operating lease payments in the aggregate, which include escalation
    clauses and real estate taxes, with initial remaining terms of more
    than one year at June 1, 1996, are summarized as follows:

                                             Total     Related party
                                            leases         leases   
                                            ------     -------------
                                                (in thousands)

                    1997                    $  759          $ 69
                    1998                       465            25
                    1999                       399
                    2000                       414
                    2001                       429
                    Thereafter               2,531              
                                            ------          ----

                                            $4,997          $ 94
                                            ======          ====



                                      -27-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE J - COMMITMENTS AND CONTINGENCIES (continued)

  The Company has an employment contract with a key executive that
    provides for a term of eight years.  Future annual commitments with
    respect to this contract at June 1, 1996, are summarized as
    follows:

                                                      (in thousands)

                    1997                                  $  250
                    1998                                     250
                    1999                                     250
                    2000                                     250
                    2001                                     250
                    2002                                     125
                                                          ------

                                                          $1,375
                                                          ======


NOTE K - COMMON STOCK

  In August 1983, the Company adopted a Stock Option Plan (the "1983
    Plan").  The 1983 Plan provides for the grant to key employees of
    both nonqualified stock options and incentive stock options.  A
    total of 1,742,694 shares of the Company's Common Stock may be
    issued under the 1983 Plan pursuant to the exercise of options.
    All stock options must have an exercise price of not less than the
    market value of the shares on the date of grant.  Options will be
    exercisable over a period of time to be designated by the
    administrators of the 1983 Plan (but not more than 10 years from
    the date of grant) and will be subject to such other terms and
    conditions as the administrators may determine.  The 1983 Plan
    terminates in December 2005.

  In August 1984, the Company adopted a second Stock Option Plan (the
    "1984 Plan").  The 1984 Plan provides for the grant to members of
    the Board of Directors and consultants of nonqualified stock
    options.  A total of 435,553 shares of the Company's Common Stock
    may be issued under the 1984 Plan pursuant to the exercise of
    options.  All stock options must have an exercise price of not less
    than the market value of the shares on the date of grant.  Options
    will be exercisable over a period of time to be designated by the
    administrators of the 1984 Plan (but not more than 10 years from
    the date of grant) and will be subject to such other terms and
    conditions as the administrators may determine.  The 1984 Plan
    terminates in December 2005.


                                      -28-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE K - COMMON STOCK (continued)

  On June 1, 1996, options for 640,180 shares were exercisable at
    prices ranging from $3.88 to $11.33 per share under the 1983 Plan
    and 185,954 shares were exercisable at prices ranging from $3.88 to
    $11.38 per share under the 1984 Plan.  On June 1, 1996, there
    remained 207,088 and 103,636 shares available for granting of
    options under the 1983 and 1984 Plans, respectively.

  The following schedules summarize the changes in stock options for
    the three fiscal years ended June 1, 1996:

                           1983 Plan                  1984 Plan        
                   -------------------------  -------------------------
                   Number of    Option price  Number of    Option price
                    shares       per share     shares       per share  
                   ---------    ------------  ---------    ------------

  Outstanding at
    May 29, 1993    806,867  $5.58 to $12.02   133,437  $5.58 to $15.79
  Granted             2,185             4.58     7,957             4.71
  Cancelled        (111,544)  5.58 to  11.33                           
                   -------------------------  -------------------------
  Outstanding at
    May 28, 1994    697,508   4.58 to  12.02   141,394   4.71 to  15.79
  Granted           968,882   3.88 to   4.48   178,875   3.88 to   4.48
  Cancelled        (394,542)  4.48 to  12.02   (74,793)  5.58 to  15.79
                   -------------------------  -------------------------
  Outstanding at
    June 3, 1995  1,271,848   3.88 to  11.33   245,476   3.88 to  15.03
  Granted            81,612             9.10    52,350   5.83 to  13.25
  Cancelled         (45,111)  4.48 to   9.23    (5,909)           15.03
  Exercised        (145,682)  4.01 to  11.33    (2,500)            4.71
                   -------------------------  -------------------------
  Outstanding at
    June 1, 1996  1,162,667  $3.88 to $11.33   289,417  $3.88 to $13.25
                  ==========================   ========================

  On June 1, 1996, the weighted average exercise price for outstanding
    options under the 1983 and 1984 Plans was $5.16 and $5.97 per
    share, respectively.
 
  Options granted prior to the Company's recapitalization on October
    26, 1992 are exercisable one-half in Class A Common Stock and one-
    half in Class B Common Stock.  Options granted after the
    recapitalization are exercisable in Class B Common Stock.

  In August 1985, the Company adopted an Employee Stock Purchase Plan
    (the "Employee Plan").  The Employee Plan provides for the purchase
    by employees of Company stock at a discounted price of 85% of the
    market value of the shares on the date of purchase.  A total of
    150,000 shares of the Company's Common Stock may be purchased under
    the Employee Plan which terminates on September 30, 1998.  During
    1996, employees purchased 932 shares, at prices ranging from $4.57
    to $8.82.  Total proceeds received by the Company approximated
    $5,000.



                                      -29-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE K - COMMON STOCK (continued)
 
  On January 10, 1994, the Board of Directors declared a 3% stock
    dividend on shares of Class A and Class B Common Stock.  The
    dividend, payable in nonvoting Class B Stock, was distributed on
    March 11, 1994 to shareholders of record on February 11, 1994.  On
    January 24, 1995, the Board of Directors declared a 3% stock
    dividend on shares of Class A and Class B Common Stock.  The
    dividend, payable in nonvoting Class B Stock, was distributed on
    March 16, 1995 to shareholders of record on February 24, 1995.  On
    January 23, 1996, the Board of Directors declared a 3% stock
    dividend on shares of Class A and Class B Common Stock.  The
    dividend, payable in nonvoting Class B Stock, was distributed on
    March 15, 1996 to shareholders of record on February 23, 1996.
    Earnings per common share have been retroactively adjusted to
    reflect the stock dividends.


NOTE L - OTHER RELATED PARTIES

  A director provided services, both as a consultant and employee, to
    the Company during 1996, 1995 and 1994.  Fees for such services,
    including fees relating to attendance at directors' meetings, were
    approximately $319,000, $165,000 and $88,000 during 1996, 1995 and
    1994, respectively.  In connection with the sale of SDI in November
    1995, this director resigned as a director of SDI and received an
    investment banker's fee of $905,000, a bonus of $191,000 arising
    from the sale and a payment of $268,000 in connection with the
    surrender of outstanding stock options in SDI.

  In connection with the sale of SDI, an executive officer resigned as
    a director of SDI and received a bonus of $191,000 arising from the
    sale and a payment of $268,000 in connection with the surrender of
    outstanding stock options in SDI.

  Two other directors provided consulting services to the Company
    during 1996, 1995 and 1994.  Fees for such services, including fees
    relating to attendance at directors' meetings, were approximately
    $196,000, $196,000 and $195,000 during 1996, 1995 and 1994,
    respectively.



                                      -30-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE M - INDUSTRY SEGMENT AND GEOGRAPHIC AREA OPERATIONS

  The Company is engaged in the manufacture and distribution of a wide
    variety of products which are classified into two industry
    segments:  Diagnostic products and AngioDynamics products.
    Diagnostic products encompass both contrast systems, consisting of
    barium sulfate formulations and related medical devices used in X-
    ray, CT-scanning and other imaging examinations, and non-contrast
    systems, including diagnostic radiology devices, custom contract
    pharmaceuticals, gastrointestinal cleansing laxatives, X-ray
    protection equipment, and immunoassay tests.  AngioDynamics
    products include stent products, angiographic and fluid management
    products, and thrombolytic products used in the interventional
    medicine marketplace.  The Company's primary business activity is
    conducted with radiologists and hospitals, located throughout the
    U.S. and abroad, through numerous distributors.  The Company's
    exposure to credit risk is dependent, to a certain extent, on the
    healthcare industry.  The Company performs ongoing credit
    evaluations of its customers and does not generally require
    collateral; however, in certain circumstances, the Company may
    require letters of credit from its customers.

  In the tables below, operating profit (loss) from continuing
    operations includes total net sales less operating expenses.
    Identifiable assets are those associated with industry segment or
    geographic area operations, excluding loans to or investments in
    another industry segment or geographic area operation.
    Intersegment sales and intergeographic sales are not material.

  In 1996, 1995 and 1994, there was one customer to whom sales of
    Diagnostic products represented 16%, 15% and 16% of total sales,
    respectively.  Approximately 21% and 17% of accounts receivable
    pertained to this customer at June 1, 1996 and June 3, 1995,
    respectively.





                                      -31-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE M - INDUSTRY SEGMENT AND GEOGRAPHIC AREA OPERATIONS (continued)

  Industry Segments                   1996         1995*        1994*
                                    -------      -------      -------
                                              (in thousands)
    Net Sales
      Diagnostic products           $80,936      $81,525      $80,966
      AngioDynamics products         11,696        7,396        5,001
      Eliminations                     (700)        (395)        (322)
                                    -------      -------      -------

    Total Net Sales                 $91,932      $88,526      $85,645
                                    =======      =======      =======

    Operating Profit (Loss)
      Diagnostic products            $2,509       $7,452       $4,658
      AngioDynamics products         (1,536)      (4,603)      (3,468)
      Eliminations                      (16)         (12)          10
                                    -------      -------      -------

    Total Operating Profit           $  957       $2,837       $1,200
                                    =======      =======      =======

    Identifiable Assets
      Diagnostic products           $83,304      $62,585      $59,760
      AngioDynamics products         12,945        8,529        6,911
      Discontinued operation                       5,033        5,162
      Eliminations                     (212)         (52)        (302)
                                    -------      -------      -------

    Total Identifiable Assets       $96,037      $76,095      $71,531
                                    =======      =======      =======

    Depreciation and Amortization
      Diagnostic products            $2,111       $2,109       $1,986
      AngioDynamics products            317          278          350
      Discontinued operation            124          413          392
                                    -------      -------      -------

    Total Depreciation and
      Amortization                   $2,552       $2,800       $2,728
                                    =======      =======      =======

    Capital Expenditures
      Diagnostic products            $3,850       $4,187       $1,330
      AngioDynamics products            370          361          527
      Discontinued operation             11          264          318
                                    -------      -------      -------

    Total Capital Expenditures       $4,231       $4,812       $2,175
                                    =======      =======      =======

* Net sales and operating profit (loss) amounts have been reclassified
  to reflect the discontinued operation described in Note B.



                                      -32-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE M - INDUSTRY SEGMENT AND GEOGRAPHIC AREA OPERATIONS (continued)

  Geographic Areas

    The following geographic area data includes net sales, operating
      profit (loss) generated by and assets employed in operations
      located in each area:

                                      1996         1995*        1994*
                                    -------      -------      -------
                                              (in thousands)
    Net Sales
      U.S. operations               $71,939      $65,073      $63,422
      International operations:
        Canada                       12,254       14,100       14,301
        Other                        13,456       13,763       12,196
      Eliminations                   (5,717)      (4,410)      (4,274)
                                    -------      -------      -------

    Total Net Sales                 $91,932      $88,526      $85,645
                                    =======      =======      =======

    Operating Profit (Loss)
      U.S. operations                $1,084       $  118      $(2,086)
      International operations:
        Canada                         (410)       2,350        3,143
        Other                           225          456          100
      Eliminations                       58          (87)          43
                                    -------      -------      -------

    Total Operating Profit           $  957       $2,837      $ 1,200
                                    =======      =======      =======

    Identifiable Assets
      U.S. operations:
        Continuing operations       $73,604      $47,590      $48,356
        Discontinued operation                     5,033        5,162
      International operations:
        Canada                       15,543       15,816       12,433
        Other                         8,067        8,857        7,731
      Eliminations                   (1,177)      (1,201)      (2,151)
                                    -------      -------      -------

    Total Identifiable Assets       $96,037      $76,095      $71,531
                                    =======      =======      =======

* Net sales and operating profit (loss) amounts have been reclassified
  to reflect the discontinued operation described in Note B.





                                      -33-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

              June 1, 1996, June 3, 1995 and May 28, 1994


NOTE M - INDUSTRY SEGMENT AND GEOGRAPHIC AREA OPERATIONS (continued)

  The Company's domestic export sales by geographic area are summarized
    as follows:
                                      1996         1995         1994 
                                     ------       ------       ------
                                              (in thousands)

      Europe                         $5,655       $2,605       $1,728
      Other                           3,783        3,421        3,206
                                     ------       ------       ------

                                     $9,438       $6,026       $4,934
                                     ======       ======       ======


NOTE N - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

  Quarterly results of operations during 1996 and 1995 were as follows:

                                                  1996               
                                   ----------------------------------
                                    First   Second    Third   Fourth
                                   quarter  quarter  quarter  quarter
                                   -------  -------  -------  -------
                                  (in thousands, except per share data)

    Net sales                      $21,999  $23,005  $21,550  $25,378
    Gross profit                     9,131    9,623    8,209    9,451
    Net earnings                       569   20,087        9      343
    Earnings per common share (1)
      Primary (2)                      .06     2.09      .00      .03
      Fully diluted (2)                .06     2.07      .00      .03

                                                1995 (3)             
                                   ----------------------------------
                                    First   Second    Third   Fourth
                                   quarter  quarter  quarter  quarter
                                   -------  -------  -------  -------
                                  (in thousands, except per share data)

    Net sales                      $21,545  $21,377  $19,856  $25,748
    Gross profit                     9,379    8,834    7,455   11,013
    Net earnings (loss)              1,050      455   (1,077)   1,202
    Earnings (loss) per common
      share (1)
        Primary and fully diluted      .12      .05     (.12)     .13

  (1) Earnings per common share have been retroactively restated to
      reflect the total shares issued after the 3% stock dividends
      described in Note K.

  (2) The sum of the quarters does not equal the fiscal year due to
      rounding and changes in the calculation of weighted average shares.

  (3) Reclassified to reflect the discontinued operation described in
      Note B.



                                      -34-
<PAGE>
                     E-Z-EM, Inc. and Subsidiaries

            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                             (in thousands)


     Column A       Column B        Column C         Column D  Column E
     --------       --------        --------         --------  --------
                                    Additions      
                              --------------------
                                 (1)        (2)
                     Balance             Charged to             Balance
                       at     Charged to   other                at end
                    beginning costs and  accounts-  Deductions-   of
    Description     of period  expenses   describe    describe  period 
    -----------     ---------  --------   --------    --------  ------ 

Fifty-two weeks
  ended May 28, 1994

Allowance for
  doubtful accounts..  $353     $149                  $ 96 (a)   $406
                        ===      ===                   ===        ===

Fifty-three weeks
  ended June 3, 1995

Allowance for
  doubtful accounts..  $406     $ 91                  $ 32 (a)   $465
                        ===      ===                   ===        ===

Fifty-two weeks
  ended June 1, 1996

Allowance for
  doubtful accounts..  $465     $176                  $114 (b)   $527
                        ===      ===                   ===        ===

(a) Amounts written off as uncollectible.

(b) Represents amounts written off as uncollectible of $64,000 and an
    amount deducted in conjunction with the sale of SDI of $50,000.




                                      -35-